Telx Files for IPO

Colocation and interconnection provider Telx has filed an S-1 with the SEC in preparation for an IPO in which it hopes to raise as much as $100M. Telx operates 15 network neutral data centers in 9 Tier 1 markets, and they have a particular focus on interconnection services with some 28,272 in service at the end of 2009. They will use the funds, unsurprisingly, to accelerate the growth of their business. That probably means organically, but they did leave open the possibility of M&A.

A publicly traded Telx will help fill the gap for investors left by Equinix's acquisition of Switch & Data, which had been one of the chief alternatives. They are not quite profitable yet, but they have grown rapidly over the past three years. In 2009 revenues reached $98M, up 40% from 2008, which in turn was up 37% from 2007. One hesitates to see what they might call 'accelerated' growth. Some 60% of their revenues come from colocation, and most of the rest from interconnection services. Their balance sheet features some $40M in cash and $130M in long term debt.

You know... it's not an IPO parade just yet, but there has clearly been a shift in the market. There is a selection of companies across the sector that have been itching to go public but have been held back by the economy. But not anymore. Last month it was Force10 that finally followed through with its S-1. Earlier this week it was Broadsoft's turn. That's one each in the equipment, software, and now data center sectors - so when is fiber's turn? The likeliest of privately held fiber operators to go public is perhaps Zayo Group, but things have been quiet on that front so far. Their rumored acquisition of AGL Networks (which I continue to hear about) may keep them busy for a while though.